What is Internal Rate of Return (IRR)?

IRR is the discount rate that makes the NPV of all cash flows equal to zero. It represents the annualized effective compounded return rate of an investment. Higher IRR = more profitable investment.

What is a hurdle rate?

A hurdle rate is the minimum acceptable return for an investment. If IRR exceeds the hurdle rate, the project is considered worthwhile. Common hurdle rates are 8-15% for corporate investments.

What is MOIC (Multiple on Invested Capital)?

MOIC shows how many times your money was multiplied. A 2.0x MOIC means you doubled your money. It's calculated as total cash inflows divided by total investment.

When should I use IRR vs NPV?

Use NPV when comparing projects of different sizes. Use IRR when you want to know the percentage return. IRR can give misleading results for non-conventional cash flows (alternating positive and negative).

Yes, a negative IRR means the investment loses money. It indicates the total cash inflows are less than the initial investment, even without considering the time value of money.

IRR Calculator

Calculate the Internal Rate of Return and evaluate investment profitability.

Investment

Initial Investment

₹

Total upfront investment at year 0.

Hurdle Rate

Minimum acceptable return rate.

Cash Flows

Year 1

₹

Year 2

₹

Year 3

₹

Year 4

₹

Year 5

₹

Below 12% Hurdle

Internal Rate of Return

N/A

annualized return

0.0x

MOIC

₹0

Net Profit

Invested

₹1,00,000

Total Cash In

₹0

Net Profit

₹0

Documentation

How It Works

IRR finds the discount rate where NPV equals zero using Newton-Raphson iteration. It tells you the break-even cost of capital for a project.

Formula

Loading formula…

IRR = N/A for this cash flow series

Frequently Asked Questions

How to Use

About the IRR Calculator

What it calculates

This irr calculator models key business metrics for startups and small companies. Find the Internal Rate of Return for investment projects.

When to use it

Use when forecasting runway, pricing, margins, or growth to support business planning.

Example

Adjust the inputs above to model your specific scenario with the IRR Calculator.

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IRR Calculator

N/A

0.0x

₹0

How It Works

Formula

About the IRR Calculator

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